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Similar arrangements exist with the distribution of our Non-U.S. Funds where, generally, oursubsidiary that distributes the funds in the local market arranges for and pays commissions and certain otherfees to banks and other intermediaries, a portion of which fees is paid from maintenance fees received bythe subsidiary and a portion of which may derive from the management fees paid to our various affiliates bythe funds.Class C shares are generally more costly to us in the year of sale, but they allow us to be competitiveby increasing our presence in various distribution channels. Historically, Class B (or equivalent) and certainof our Class C deferred commission assets (“DCA”) arising from our U.S., Canadian and Europeanoperations were financed through transfers to or other arrangements with a company in which we held a49% ownership interest as of September 30, 2009. We are in the process of selling our ownership interestsin this company to the holder of the 51% ownership interest and expect to complete this divestiture in thefiscal year ending September 30, 2010 (“fiscal year 2010”). In September 2009, all DCA held by thiscompany was sold to FTDI or the holder of the 51% ownership interest, and repayments to the companyunder these financing arrangements have been discontinued.FTDI and/or its affiliates may make the following additional payments to broker/dealers that sell sharesof our funds:Marketing support payments. FTDI may make payments to certain broker/dealers who are holders ordealers of record for accounts in one or more of our open-end U.S. Funds. Consistent with the provisionsand limitations set forth in a fund’s Rule 12b-1 Plan, the fund may reimburse a broker/dealer for the cost ofsome or all of the marketing support payments. A broker/dealer’s marketing support services may includebusiness planning assistance, advertising, educating broker/dealer personnel about the funds andshareholder financial planning needs, placement on the broker/dealer’s list of offered funds, and access tosales meetings, sales representatives and management representatives of the broker/dealer. FTDIcompensates broker/dealers differently depending upon, among other factors, sales and asset levels,redemption rates and the level and/or type of marketing and educational activities provided by the broker/dealer. Such compensation may include financial assistance to broker/dealers that enable FTDI toparticipate in and/or present at conferences or seminars, sales or training programs for invited registeredrepresentatives and other employees, client and investor events and other broker/dealer-sponsored events.These payments may vary depending upon the nature of the event. FTDI periodically reviews its marketingsupport arrangements to determine whether to continue such payments. In the case of any one broker/dealer,marketing support payments may not exceed the sum of 0.08% of that broker/dealer’s current year’s totalsales of our U.S. Funds and 0.05% (or 0.03%) of the total assets of equity (or fixed income) of our U.S.Funds attributable to that broker/dealer, on an annual basis. The statement of additional information for eachretail U.S. Fund, provided to investors in such funds upon request, provides a list of broker/dealers thatreceive such marketing support payments. FTDI may also make marketing support payments to financialintermediaries that serve as plan service providers to certain employer sponsored retirement plans.Marketing support or similar payments made to intermediaries located outside the United States, withrespect to investments in Non-U.S. Funds, may exceed the above-stated limitations.Transaction support payments. FTDI may pay ticket charges of up to $20 per purchase or exchangeorder placed by a broker/dealer or one-time payments for ancillary services, such as setting up funds on abroker/dealer’s fund trading system.Other payments. From time to time, FTDI, at its expense, may make additional payments to broker/dealers that sell or arrange for the sale of shares of our U.S. Funds. FTDI routinely sponsors due diligencemeetings for registered representatives during which they receive updates on various funds and are affordedthe opportunity to speak with portfolio managers. Invitation to these meetings is not conditioned on selling aspecific number of shares. Those who have shown an interest in our funds, however, are more likely to be10